Community Banks Adopting Mobile Payments

Credit unions’ competition is not standing idle when it comes to mobile banking services. A new report from the Independent Community Bankers of America found that 37% of those institutions now offer mobile payments, up 23% in the past two years.

Another 43% intend to offer the service by 2015, according to the ICBA’s Community Bank Payment Survey released this week.

Fifty-four percent of banks of more than $501 million in assets now offer mobile payments, the ICBA said, while those with $251 million to $500 million in assets include 46% offering that service among their ranks.

A recent CUNA survey, meanwhile, found that more than of smartphone users now use their devices for payments.

“The 2013 ICBA Community Bank Payments Survey confirms what we are seeing anecdotally in the marketplace – that community banks are increasingly offering mobile banking services to meet the evolving needs of their customers and enhance overall customer service,” said Viveca Ware, ICBA executive vice president, regulatory policy.

Profitability as the motivating factor for offering the service, meanwhile, has dropped since a similar 2011 survey, the ICBA said.

“In fact, only 59% of community banks indicated that increasing profitability is one of their most important payments strategies. This is down from 70% in 2011. While 55% of community banks continue to see payments as a source of efficiency, a greater number now see payments as a way to improve customer service,” the trade group said.

“Community banks, by definition, are customer and community driven,” Samuel Vallandingham, president/CEO of the First State Bank in Barboursville, W.Va., and chairman of the ICBA’s Bank Operations and Payments Committee, said in the trade group’s statement. “According to this year’s survey, most community banks set their bank’s strategic direction in payments by listening to their customers.”